DMG & Partners kept a buy rating on Singapore Airlines Ltd (SIA) and said it was encouraged by an improvement in passenger traffic.
"We think its valuation has hit bottom. SIA is backed by a strong balance sheet, which would enable it to whether any downturn going forward," the broker said and retained its price target of S$12.47.
SIA's shares were down 0.55 percent at S$10.94. Out of 23 analysts tracking the stock, 13 have a hold rating, five have a buy or strong buy and five have a sell or strong sell.
DMG said recent changes at the company including cuts in cargo capacity, voluntary separation scheme for employees and higher fuel surcharges would enhance SIA's margins and profitability from fiscal year 2013.
SIA said the operating environment remained challenging and passenger yields were likely to come under pressure.
For a related story and SIA's statement, click:
1500 (0700 GMT)
(Reporting by Mark Tay in Singapore)
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